Tenancy deposit law meets surprise problem of unclaimed cash

Companies looking after private tenants' deposits are facing an unexpected problem – what to do with unclaimed money. 

The Herald reports today that unclaimed deposits under the statutory scheme, which began operating in 2012, already amount to £400,000 and could reach £1m by 2018. The scheme, which requires deposits to be lodged with an approved company, was designed to protect tenants' money from landlords who held on to it without proper cause.

SafeDeposits Scotland, the largest company in the tenancy deposit market, says its legal advice is that the money could fall under the rule that assets unclaimed for six years belong to the Crown, though the Scottish Government has stated that there is no time limit for claiming the money.

Jennifer Paice, chief executive of SafeDeposits Scotland, said that no one had expected this scenario and called for the law to be clarified. She would like unclaimed money to go into a trust to help improve the private sector, for example by supporting tenants' groups.